The European Commission approves planned acquisition of Chips by Orkla
Concludes that the transaction would not significantly impede effective competition in the EEA.
07/03/05 The European Commission has granted clearance under the EU Merger Regulation to the proposed acquisition of Chips by Orkla.
The Commission’s investigation highlighted some concerns in certain sectors of the Finnish convenience foods market, but Orkla was able to address these concerns by offering to terminate some of its current distribution arrangements. In the light of these commitments, the Commission has concluded that the transaction would not significantly impede effective competition in the EEA or any substantial part of it and has therefore approved the concentration.
In January the Norwegian group Orkla, active in branded consumer goods, announced a public tender offer for all shares in Chips Abp, a Finnish snacks and food company mainly operating in the Nordic and Baltic countries. The takeover bid was notified to the Commission under the Merger Regulation.
The Commission’s market investigation identified serious competition concerns resulting from the combination of the merging parties’ activities in the Finnish market for the sale of frozen pizzas to the retail sector. The Commission has also verified whether salted biscuits produced by Orkla were competing with the snacks sold by Chips. The market investigation has confirmed that this was not the case since these two products correspond to different needs for the consumer and thus belong to different product markets.
In order to meet the Commission’s regulatory concerns, Orkla offered to terminate the existing distribution agreement between Chips and a Swedish company, Gunnar Dafgard, which accounts for all of Chips’ sales of frozen pizza in Finland. The Commission considers these commitments sufficient to meet its concerns, as they ensure that the Billy’s pizza brand will be managed and distributed independently from the merged businesses.
